Susan
K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest of agency’s evaluation of
proposals and award decision is denied where the record shows they were
reasonable and consistent with the terms of the solicitation and applicable
procurement rules.

DECISION

McGoldrick Construction
Services Corporation protests the award
of a contract to Strategic Perspectives Development, LLC (SPD) under request
for proposals (RFP) No. VA-101-07-RP-0030, issued by the Department of Veterans
Affairs (VA) for construction services at the VA Medical Center in San
Antonio, Texas. McGoldrick contends that the evaluation of
SPD’s proposal and the agency’s selection of that firm for award were
unreasonable and inconsistent with the solicitation’s terms.

We deny the protest.

The RFP, issued as a service-disabled veteran-owned small
business set-aside, sought proposals for the award of a fixed-price contract
for construction services, including architectural, mechanical, electrical,
utility, fire alarm, and fire protection systems work, and asbestos and lead
abatement services. RFP at 1. Offerors were advised that the evaluation and
award selection would be “made on the basis of both cost and technical
considerations most advantageous to the Government,” that the technical
evaluation factors combined (construction management, past performance, and schedule,
listed in descending order of importance) were “approximately equal in
importance to cost or price,” and that “if the technical proposals are
essentially equal, the award will be made on the basis of lowest cost.” Id.
at 2-3. Cost/price was to be evaluated
“on the basis of its realism and acceptability to the Government.” Id.

For the construction management evaluation factor,
offerors were to describe project personnel experience and technical/management
approach (including a list of all proposed major subcontractors). Id.
at 5-6. The past performance evaluation
factor included a subfactor for corporate project experience (regarding recent
projects of similar size and scope) and a less important subfactor for client
satisfaction; for the evaluation of corporate project experience, offerors were
to describe their “experience as a prime contractor, subcontractor or other,”
with prime contractor experience being most important. Id. at
3, 6-7. For the final technical evaluation
factor, schedule, the offeror’s proposed schedule was to be evaluated for
realism and reasonableness. Id.
at 3.

Following a successful size status protest, the agency
terminated an initial award it had made under the RFP and reevaluated the three
remaining technically acceptable proposals to make a new source selection. SPD submitted the lowest-priced proposal (at
$2,958,092); the firm’s technical proposal received an evaluation score of 58.3
points (out of a possible 100 points).
McGoldrick submitted the highest-priced proposal (at $3,917,000); its
technical proposal received a score of 78 points. A third offeror’s proposal was rated higher
for technical merit than SPD’s proposal, but lower than McGoldrick’s; that firm
proposed a price higher than SPD’s and lower than McGoldrick’s.[1] Having determined that the payment of the
price premiums involved in an award to either of the two higher-rated proposals
was not warranted in light of the acceptable level of technical competence
offered by SPD’s substantially lower-priced proposal, the agency concluded that
SPD’s proposal presented the best value to the agency and made an award to the
firm. This protest followed.

The protester challenges the evaluation of the awardee’s
proposal under the corporate project experience subfactor of the past
performance factor, arguing that, as a new business, SPD could not have shown
corporate experience performing similar work. [2] The protester also challenges the propriety
of the agency’s determination that the price premium associated with McGoldrick’s
higher-priced, higher-rated proposal was not warranted in light of the
technical capability demonstrated by Strategic’s substantially lower-priced
proposal.

In response to the protester’s challenge to the evaluation
of SPD’s past performance, the agency reports that SPD’s proposal was credited
under the past performance factor’s subfactor for corporate project experience
for the relevant experience of its major subcontractor that recently
successfully performed substantially similar work at another VA medical
facility. Additionally, in response to
McGoldrick’s challenge to the award having been made to a firm that submitted a
lower-rated, lower-priced proposal, the agency reports that the three technically
acceptable proposals had varying strengths, with limited, if any, weaknesses,
and demonstrated the capability to successfully perform the work required
here. The agency further reports that in
finding no significant advantages in McGoldrick’s higher-rated proposal that
would warrant payment of the protester’s substantially higher price, the agency
made award to SPD as the overall best value offeror.

In reviewing a protest
against an agency’s evaluation of proposals and award, including a tradeoff
determination, we examine the record to determine whether the agency’s judgment
was reasonable and consistent with the solicitation’s evaluation criteria and
applicable statutes and regulations. Ostrom
Painting & Sandblasting, Inc., B-285244, July 18, 2000, 2000 CPD para. 132 at 4.
Generally, in a negotiated procurement, an agency may properly select a
lower-rated, lower-priced proposal where it reasonably concludes that the price
premium involved in selecting a
higher-rated proposal is not justified in light of the acceptable level
of technical competence available at a lower price. Bella Vista Landscaping, Inc.,
B-291310, Dec. 16, 2002, 2002 CPD para. 217 at 4. A protester’s
mere disagreement with the agency’s determinations does not establish that the
evaluation or source selection was unreasonable. Weber Cafeteria Servs., Inc., B‑290085.2,
June
17, 2002, 2002 CPD para. 99 at
4. Our review of the record here
confirms the reasonableness of the agency’s evaluation of the proposals and its
tradeoff determination.

While McGoldrick contends
that the VA unreasonably considered SPD’s subcontractor’s experience, it is
well-established that in evaluating the past performance of a new business, an
agency may consider the experience of the firm’s proposed subcontractors,
unless it is prohibited from doing so by the terms of the solicitation, since
such experience could be reasonably predictive of the offeror’s performance
under the contract. SeeCleveland Telecomms. Corp., B-257294, Sept. 19, 1994, 94‑2 CPD para. 105; Commercial Bldg.
Serv., Inc., B‑237865.2, B-237865.3, May 16, 1990, 90-1 CPD para. 473 at 4. To the extent the protester contends that the
agency failed to confirm the subcontractor’s role in performance of the work
and whether that firm’s experience is relevant to the RFP’s requirements, the
agency reports, and our review of the record confirms, that the awardee’s major
subcontractor is an experienced construction firm with relevant and recent
successful performance of substantially similar renovation work at another VA
medical facility and will have substantial responsibility for the performance
of the work here. Under these
circumstances, the agency reasonably
considered the subcontractor’s experience in evaluating the awardee’s past
performance.[3]

To the extent McGoldrick
argues that the agency’s award to SPD on the basis of its lower-rated,
lower-priced proposal violates the RFP’s terms, which McGoldrick interprets as
permitting award on that basis only if the proposals were essentially equal in
technical merit, the protester’s position is based on an unreasonable
interpretation of the RFP, since, as stated above, the RFP clearly permitted a
tradeoff between equally weighted technical and price factors. SeeAngel Menendez Envtl. Servs.,
Inc., supra, at 3-4. The
agency reports, and our review of the record confirms, that the contracting
officer, as the source selection authority, considered the evaluation
narratives and worksheets and found no significant advantages or disadvantages
between the proposals to justify the payment of the price premium associated
with McGoldrick’s proposal ($1 million), given the level of technical
competence available at SPD’s substantially lower price. McGoldrick simply has not provided any
persuasive basis to question the reasonableness of the agency’s award to SPD on
the basis of its lower-rated, substantially lower-priced proposal.

[2]
In its supplemental protest, McGoldrick raised additional challenges that lack
sufficient support to constitute valid bases of protest, seePacific
Photocopy and Research Servs., B‑278698, B-278698.3, Mar. 4, 1998,
98-1 CPD para. 69 at 4, and fail to show a reasonable possibility of competitive
prejudice to the firm, seeMcDonald-Bradley, B-270126, Feb. 8,
1996, 96-1 CPD para. 54 at 3; Statistica, Inc. v. Christopher, 102 F.3d
1577, 1581 (Fed. Cir. 1996), and thus are not appropriate for further
review. For instance, while the
protester generally questioned certain handwritten adjustments made to the
point scores, the agency reported that they were merely mathematical adjustments
to correct the weight assigned to several evaluation subfactors and did not
change the substance of the underlying evaluation. McGoldrick provides no persuasive rebuttal to
the agency’s explanation of this essentially administrative task and fails to
show that it has been prejudiced in any way by the adjustment. Similarly, McGoldrick argued that assigning
the maximum 100 points to the lowest-priced proposal placed too much emphasis
on the price factor for award (since only 78, not 100, points were given to the
highest-rated (McGoldrick’s) technical proposal). The protester has failed to show any
resulting prejudice, however, since even if its technical proposal had received
100 points, that would require a proportionate rise in point scores for the
other highly-rated but lower-priced proposals, including SPD’s. It is clear that the differential among the
three proposals’ overall (technical and price) point scores would remain
virtually unchanged, providing no reasonable basis to question the award selection.

[3]
To the extent McGoldrick objects to the agency’s assertion that “SPD did not
receive an advantage over other offerors even though it had no corporate
experience of its own,” Comments, Mar. 24, 2008, at 5, the record shows that
the agency in fact did give higher scores where the corporate experience
pertained to the offeror itself (as in McGoldrick’s case), rather than its
proposed subcontractors (as in SPD’s case).
Moreover, in light of the highly favorable past performance information considered
for both offerors, we see no support in the record for McGoldrick’s speculation
that its past performance was, or should have been, considered, to be of higher
quality than SPD’s; in this regard, McGoldrick itself has neither identified
any aspect of its own past performance for which it believes it did not receive
appropriate evaluation credit, nor provided any basis to question the favorable
past performance information available for SPD’s major subcontractor (as well
as SPD’s key personnel’s relevant past experience) for which SPD earned a
favorable past performance score.